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Wednesday, 07 December 22
MARKET INSIGHT - INTERMODAL
 China’s coal imports from January to October were 230.1m mt, a decrease of around 10.7% y-o-y (2021 totalled 323.2m mt). The question is if this negative momentum will remain in 2023, pressuring the Dry Baltic index. While the easing of Chinese Covid strict policies which coupled with the 70% coal reliance of North China for its heating boiler amidst the upcoming colder winter can trigger a demand boost for coal, we will focus on some adverse fundamentals which point to pessimistic expectations for its 2023 seaborne coal imports.
Domestic coal output on a rise.
Chinese total coal output of 4.12 billion mt in 2021 contributed around 92% of its total consumptions with 2021 imports standing at 323 million mt. In 2022, domestic production during the first three quarters stood 3.32 billion mt, an increase of +14% compared to 2021 first 3 quarters while the 2022 October output of 370m mt is up by +13m mt compared to October 2021 output. While coal represents almost 55% of China’s energy consumption and half of coal plant expansions (+197GW) are attributed to China, a growth of around 27% of its domestic coal mining capacity could cover this increase in demand. Indeed, 559m mt of coal mines are under construction and proposed as of January 2022 in China, representing 29% of the global share followed by Australia, India, and Russia. In the short-term, a shift in local production is strengthened by policymakers' decision to support national foreign reserves while the appreciation of US$ is leading to higher coal prices for Chinese power plants thus diminishing their profit margin. In addition to that, amidst the current geopolitical tension and its effect on global trade with increases materializing across all the energy commodities globally, we believe that China will keep focusing on its national power security by keeping its inventory levels high through its local production. Indeed, current levels standing at 326.7 million mt as of the end of September which is +45% above the historical average of 225m mt and +217m mt compared to the same period last year. Covid-zero Policy will determine the growth of coal demand which however remains subdued. While Covid-19 policy relaxation has begun we do not expect that a full re-opening will take place no earlier than the end of Q12023 further trimming its coal demand.
New trade patterns in question.
China's main source of coal is Indonesia with 133 million mt (98% thermal coal) being delivered so far in 2022, followed by Russia and Mongolia with 54.01m mt (68% thermal coal) and 22.38m mt (85% metallurgical coal) respectively. While Indonesia will remain the largest supplier of coal to China yet with a fall of -16.19% so far in the first ten months of 2022 compared to the same period in 2021, the rest two nations have significantly increased their market share with Mongolia and Russia posting an increase of +60% and +12.8% respectively. While ton-mile demand is benefited from cheaper Russian coal due to European sanctions and the need to alter its trade partners, an increase in Mongolian exports could absorb a share of Russian coking coal exports especially given the recent Russian transport infrastructure limitation which leads to delays in loading and arrivals. Having said that, the new Mongolian 233km Tavan Tolgoi rail line which is estimated to cut transport costs to around US$8 per tonne compared to truck transport costs, could point towards this shift. According to the president of Mongolia, this new rail line could increase coal exports to China to 50m tonnes compared to 22.38 million so far in 2022 and its record 36.24 million tonnes in 2018. In addition to this shift, other seaborne sources of metallurgical coal namely the US, Indonesia, and Canada could see their exports further decreasing from Mongolian ones. As far as the Mongolian thermal coal exports are concerned, an increase of 61% (+1.23 million mt) has materialized during the first ten months of 2022 compared to the whole of 2021. With rail infrastructure expansions, Mongolian thermal coal exports could also increase further. The real question is, does China needs all this coal? If not, based on this year's demand, decisions will be made based on costs and transport delays and in that scenario, Mongolian exports could benefit further.
By Yiannis Parganas,
Head of Research Department
Compiled by:
Intermodal Research & Valuations
Analysts:
Yiannis Parganas
Tamara Apostolou
Disclaimer and legal disclosure: For any further queries please do not hesitate to contact our Research & Valuations Department. The information contained in this report has been obtained from various sources, as reported in the market. Intermodal Shipbrokers Co. believes such information to be factual and reliable without making guarantees regarding its accuracy or completeness. Whilst every care has been taken in the production of the above review, no liability can be accepted for any loss or damage incurred in any way whatsoever by any person who may seek to rely on the information and views contained in this material. This report is being produced for the internal use of the intended recipients only and no reproducing is allowed, without the prior written authorization of Intermodal Shipbrokers Co.
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Sunday, 03 July 22
CHINESE VICE PREMIER STRESSES CLEAN, EFFICIENT USE OF COAL - XINHUA
Chinese Vice Premier Han Zheng has stressed efforts to promote the clean and efficient use of coal, and pursue green, low-carbon and high-quality d ...
Sunday, 03 July 22
SOVEREIGN SECTOR OUTLOOK REVISED TO NEUTRAL ON UKRAINE WAR IMPACT - FITCH RATINGS
The deterioration in global sovereign credit conditions this year relative to our expectations at end-2021 has caused Fitch Ratings to change its g ...
Saturday, 02 July 22
GLOBAL SEABORNE COAL EXPORTS IN 2021 INCREASED BY 4.4% Y-O-Y TO 1147 MLN TONNES - BANCHERO COSTA
In the full 12 months of 2021, global seaborne coal exports increased by +4.4% y-o-y to 1147 mln tonnes, from 1099 mln tonnes in 2020, according to ...
Friday, 01 July 22
INDIA'S TOP CEMENT MAKER PAYING FOR RUSSIAN COAL IN CHINESE YUAN - REUTERS
India’s biggest cement producer, UltraTech Cement ULTC.NS, is importing a cargo of Russian coal and paying using Chinese yuan, according to a ...
Thursday, 30 June 22
FINANCIAL GAINS SUPPORT COAL TRANSITION - BALTIC EXCHANGE
Support for the shift away from coal dependency continues to mount, with the International Monetary Fund (IMF) calculating that the move would gene ...
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- Bayan Resources Tbk. - Indonesia
- Interocean Group of Companies - India
- Australian Commodity Traders Exchange
- Economic Council, Georgia
- Electricity Authority, New Zealand
- Chettinad Cement Corporation Ltd - India
- Dalmia Cement Bharat India
- Jorong Barutama Greston.PT - Indonesia
- Oldendorff Carriers - Singapore
- Parry Sugars Refinery, India
- ICICI Bank Limited - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- The State Trading Corporation of India Ltd
- Carbofer General Trading SA - India
- Bangladesh Power Developement Board
- GAC Shipping (India) Pvt Ltd
- Cement Manufacturers Association - India
- Neyveli Lignite Corporation Ltd, - India
- Power Finance Corporation Ltd., India
- Kobexindo Tractors - Indoneisa
- Petron Corporation, Philippines
- Kaltim Prima Coal - Indonesia
- Energy Link Ltd, New Zealand
- Coastal Gujarat Power Limited - India
- Savvy Resources Ltd - HongKong
- International Coal Ventures Pvt Ltd - India
- AsiaOL BioFuels Corp., Philippines
- Minerals Council of Australia
- The Treasury - Australian Government
- Semirara Mining Corp, Philippines
- Aboitiz Power Corporation - Philippines
- Alfred C Toepfer International GmbH - Germany
- Edison Trading Spa - Italy
- Georgia Ports Authority, United States
- Eastern Coal Council - USA
- PowerSource Philippines DevCo
- Riau Bara Harum - Indonesia
- Timah Investasi Mineral - Indoneisa
- Manunggal Multi Energi - Indonesia
- Meenaskhi Energy Private Limited - India
- Kideco Jaya Agung - Indonesia
- Grasim Industreis Ltd - India
- Marubeni Corporation - India
- Australian Coal Association
- Romanian Commodities Exchange
- McConnell Dowell - Australia
- Heidelberg Cement - Germany
- Kartika Selabumi Mining - Indonesia
- Global Green Power PLC Corporation, Philippines
- New Zealand Coal & Carbon
- TNB Fuel Sdn Bhd - Malaysia
- Indian Energy Exchange, India
- MS Steel International - UAE
- Sarangani Energy Corporation, Philippines
- Maheswari Brothers Coal Limited - India
- IEA Clean Coal Centre - UK
- Leighton Contractors Pty Ltd - Australia
- PNOC Exploration Corporation - Philippines
- Ceylon Electricity Board - Sri Lanka
- Parliament of New Zealand
- Commonwealth Bank - Australia
- Orica Mining Services - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Essar Steel Hazira Ltd - India
- India Bulls Power Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Intertek Mineral Services - Indonesia
- Trasteel International SA, Italy
- Energy Development Corp, Philippines
- Formosa Plastics Group - Taiwan
- Gujarat Electricity Regulatory Commission - India
- South Luzon Thermal Energy Corporation
- GN Power Mariveles Coal Plant, Philippines
- Price Waterhouse Coopers - Russia
- Krishnapatnam Port Company Ltd. - India
- Tata Chemicals Ltd - India
- Globalindo Alam Lestari - Indonesia
- Videocon Industries ltd - India
- Miang Besar Coal Terminal - Indonesia
- Therma Luzon, Inc, Philippines
- Aditya Birla Group - India
- Bahari Cakrawala Sebuku - Indonesia
- Coal and Oil Company - UAE
- Sinarmas Energy and Mining - Indonesia
- Rashtriya Ispat Nigam Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Tamil Nadu electricity Board
- Renaissance Capital - South Africa
- Medco Energi Mining Internasional
- LBH Netherlands Bv - Netherlands
- Directorate General of MIneral and Coal - Indonesia
- Sree Jayajothi Cements Limited - India
- Siam City Cement - Thailand
- Metalloyd Limited - United Kingdom
- Madhucon Powers Ltd - India
- Simpson Spence & Young - Indonesia
- Jindal Steel & Power Ltd - India
- PetroVietnam Power Coal Import and Supply Company
- Bhatia International Limited - India
- Gujarat Sidhee Cement - India
- Directorate Of Revenue Intelligence - India
- Bank of Tokyo Mitsubishi UFJ Ltd
- CNBM International Corporation - China
- Makarim & Taira - Indonesia
- Ministry of Finance - Indonesia
- Bhoruka Overseas - Indonesia
- Sojitz Corporation - Japan
- SMC Global Power, Philippines
- Ind-Barath Power Infra Limited - India
- ASAPP Information Group - India
- Ambuja Cements Ltd - India
- Siam City Cement PLC, Thailand
- Coalindo Energy - Indonesia
- Indonesian Coal Mining Association
- The University of Queensland
- Borneo Indobara - Indonesia
- Bukit Baiduri Energy - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Petrochimia International Co. Ltd.- Taiwan
- Baramulti Group, Indonesia
- Singapore Mercantile Exchange
- Sical Logistics Limited - India
- Malabar Cements Ltd - India
- Lanco Infratech Ltd - India
- Wilmar Investment Holdings
- Bukit Makmur.PT - Indonesia
- SMG Consultants - Indonesia
- CIMB Investment Bank - Malaysia
- Iligan Light & Power Inc, Philippines
- Indika Energy - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- Rio Tinto Coal - Australia
- Kapuas Tunggal Persada - Indonesia
- Altura Mining Limited, Indonesia
- Latin American Coal - Colombia
- Larsen & Toubro Limited - India
- Port Waratah Coal Services - Australia
- Sindya Power Generating Company Private Ltd
- Goldman Sachs - Singapore
- Mercator Lines Limited - India
- Mjunction Services Limited - India
- Billiton Holdings Pty Ltd - Australia
- Semirara Mining and Power Corporation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Ministry of Mines - Canada
- Indogreen Group - Indonesia
- Orica Australia Pty. Ltd.
- GMR Energy Limited - India
- Standard Chartered Bank - UAE
- Antam Resourcindo - Indonesia
- Karaikal Port Pvt Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Straits Asia Resources Limited - Singapore
- IHS Mccloskey Coal Group - USA
- Maharashtra Electricity Regulatory Commission - India
- Eastern Energy - Thailand
- Cigading International Bulk Terminal - Indonesia
- Bulk Trading Sa - Switzerland
- Jaiprakash Power Ventures ltd
- Central Java Power - Indonesia
- European Bulk Services B.V. - Netherlands
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- VISA Power Limited - India
- Vizag Seaport Private Limited - India
- SN Aboitiz Power Inc, Philippines
- Indo Tambangraya Megah - Indonesia
- Meralco Power Generation, Philippines
- Global Coal Blending Company Limited - Australia
- Thai Mozambique Logistica
- Kohat Cement Company Ltd. - Pakistan
- PTC India Limited - India
- Banpu Public Company Limited - Thailand
- Central Electricity Authority - India
- TeaM Sual Corporation - Philippines
- Kumho Petrochemical, South Korea
- Asmin Koalindo Tuhup - Indonesia
- Sakthi Sugars Limited - India
- Salva Resources Pvt Ltd - India
- Merrill Lynch Commodities Europe
- Uttam Galva Steels Limited - India
- GVK Power & Infra Limited - India
- Planning Commission, India
- Thiess Contractors Indonesia
- Barasentosa Lestari - Indonesia
- Xindia Steels Limited - India
- Electricity Generating Authority of Thailand
- Ministry of Transport, Egypt
- White Energy Company Limited
- Attock Cement Pakistan Limited
- Independent Power Producers Association of India
- Agrawal Coal Company - India
- San Jose City I Power Corp, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Wood Mackenzie - Singapore
- Binh Thuan Hamico - Vietnam
- Anglo American - United Kingdom
- Bharathi Cement Corporation - India
- Kepco SPC Power Corporation, Philippines
- Toyota Tsusho Corporation, Japan
- Star Paper Mills Limited - India
- OPG Power Generation Pvt Ltd - India
- Mercuria Energy - Indonesia
- Pendopo Energi Batubara - Indonesia
- Deloitte Consulting - India
- Bukit Asam (Persero) Tbk - Indonesia
- Indian Oil Corporation Limited
- Bhushan Steel Limited - India
- Vedanta Resources Plc - India
- Global Business Power Corporation, Philippines
- Samtan Co., Ltd - South Korea
- Chamber of Mines of South Africa
- Mintek Dendrill Indonesia
- Africa Commodities Group - South Africa
- Gujarat Mineral Development Corp Ltd - India
- Posco Energy - South Korea
- London Commodity Brokers - England
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